I have heard so many different views on what happened to the mortgage side of the real estate industry. Frankly I think it is truly for the better. I agree that there has been and still will be some "over-tightening" on lending practices, but something needed to change. In reality, they simply removed the ridiculous loan programs that were being offered. Basically 6 months ago if you had a 660 FICO, you didnt need a job, proof of income, etc. and you qualified for 100% purchase money! You could state nearly anything on an application for income and as long as the ratios looked good, you could get approved.

On the flip side I think it will take time for some lenders to loosen up to where they need to be. There are circumstances where a stated income program needs to be utilized or even a NO DOC loan. But the abuse of these programs were very widespread. I didn't realize how widespread until reading the message boards and seeing people say that the industry is done and how can you make a living. These are people who never tried to counsel their clients or help them with their financial situation. They found a program where they had to work as little as possible sold their fee and closed the loan. I'm not saying that we should be setting up college prepays, but I do feel responsible for my client being able to truly make their mortgage payment each month and still give little Johnny his lunch money without going broke.

My point is, I don't think the borrowers went anywhere. I think the loan sharks are finally being weeded out and people who can afford a mortgage are still receiving them. I have some who are actually saving for a down payment like people used to. Some are repairing their credit and learning what they can do to help their FICO. It will be a slower process for some but in the end the market will have "qualified" borrowers again. I just hope we can get rid of enough "unqualified" brokers until then.